Thursday, March 31, 2011

Cutting spending in order to raise it

by digby

John Boehner today:

We're listening to the people who sent us here to cut spending so we can grow our economy.

Obama last month:

I’m convinced that the only way we can make these investments in our future is if our government starts living within its means, if we start taking responsibility for our deficits. That’s why, when I was sworn in as President, I pledged to cut the deficit in half by the end of my first term. The budget I’m proposing today meets that pledge—and puts us on a path to pay for what we spend by the middle of the decade. We do this in part by eliminating waste and cutting whatever spending we can do without.

When you see the two together it doesn't really sound like there's much to argue about does it?

I wonder how the average American hears them? The Republicans are simply saying that cutting spending will grow the economy, full stop. Obama is saying that we need to cut spending but spend more for the future. Do they know the difference? And if they do, does it make sense to them?

I guess we're going to find out because the administration seems to be hooked on the idea that a message of cutting spending while also investing is something that people will instinctively understand --- and more importantly that cutting spending in order to raise spending will work. Unfortunately, in order to make that case they think they can make a splashy future deficit reduction plan along the lines of the catfood commission stand in for their alleged dedication to spending cuts.

Once you've bought into the idea that reducing spending is the most important priority, it takes on a life of its own --- and unfortunately validates the idea that cutting spending immediately will stimulate the economy. But if you want it to actually grow, you can't actually do that. It's going to be quite a show.